FAST FIVE: Bizarro Market: The 6 Questions That Keep BofA Traders Up At Night
others remain, chief among which is the unprecedented divergence between stocks and bonds, as markets increasingly price in QE4 .
Yet while that divergence appears to merely be a throwback to the market's POMO days as traders prepares for the Fed to launch QE4 sometime in 2020, many other frequent questions remain, among which Bank of America lists the following” What is the “tale of the tape”.
Putting all this together, Hartnett reaches the same conclusion as Morgan Stanley, namely that Q1 is the low for global macro data, while downside risk for growth is more likely from US where consensus sees Q2 GDP bounce to 3% from 1% in Q1.
Which brings us to the next frequently asked question.
There are three drivers that would push the indicator toward “excess bullishness” in the next 4-6 weeks: equity inflows >$50bn next 4 weeks March BofAML Fund Manager Survey (Tuesday 19th) showing cash levels of <4.5%, equity allocation up from 6% to >30% CTFC hedge fund positioning >0.5sd long risky assets (vs.